What is the legal definition of "gainful employment" or "gainful occupation" in long-term disability?
There is no one "legal definition" of these terms, however, in long-term disability those terms have generally been interpreted by the Courts to mean employment or work activity which pays amounts that are commensurate with the pre-disability income. Insurance companies have been moving away from these vague terms to attempt to provide a more predictable definition of "gainful" by trying to tie it in with a percentage of pre-disability earnings, or an amount that won't exceed the amount of the monthly benefit. For example, if your salary was $50,000.00 per annum and your LTD benefits were to pay 60% of that ($30,000 per annum or $2,500 per month), and the "any occupation" definition stated that benefits would not be paid if you were able to earn 60% of pre-disability earnings (or $2,500.00) per month, they would not have to pay LTD on an ongoing basis. The precise wording of the applicable clause in any particular policy must be closely reviewed as the use of the word "gainful" may be different from one policy to the next. Often insurance companies will suggest that "gainful" means that if you can do any work at all, if even for a few hours a week, that they are no longer responsible to pay LTD benefits. We are often successful in fighting these decisions. If this is what you have encountered and your benefits have been terminated or denied, don't hesitate to contact our office to see if you have a case.
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